S&P 500 poised to hit record high; Alcoa gains

By Yashaswini Swamynathan

REUTERS - The benchmark S&P 500 was poised to hit a fresh high on Tuesday, buoyed by easing political tensions globally and with Alcoa getting the U.S. earnings season off to a promising start.

Alcoa reported a smaller-than-expected drop in quarterly profit, sending the aluminum producer's shares up 4.7 percent premarket.

Investors appetite for equities has increased after strong economic data and low returns on government bonds, while easing political tensions in Britain and Japan have reduced some global uncertainties.

Though treasury yields are hovering at record lows, making equities more attractive, they stand to gain as central banks globally, led by Japan and Britain, chart out new stimulus measures.

"What is driving the market today is political stability in both Japan and the UK and a global drive for yield, which central banks are going to support," said John Brady, a senior vice president at R.J. O'Brien & Associates in Chicago.

Dow e-minis were up 72 points, or 0.4 percent at 8:30 a.m. ET (1230 GMT), with 25,874 contracts changing hands.

S&P 500 e-minis were up 9.75 points, or 0.46 percent, with 227,515 contracts traded.

Nasdaq 100 e-minis were up 25.25 points, or 0.56 percent, on volume of 23,029 contracts.

The S&P 500, which came close several times this year to topping its May 2015 record, finally broke through on Monday to a new high of 2,143.16, and closed just 0.2 percent below.

Strong corporate reports, along with low expectations for a hike in interest rates anytime soon, should keep the momentum in the market going.

While profits of S&P 500 companies are expected to have fallen 5 percent in the second quarter, mirroring the first, analysts expect a return to growth throughout the second half of the year, according to Thomson Reuters data.

Seagate jumped 15 percent to $27.68, topping the S&P 500 premarket, after the hard-disk drive maker estimated quarterly results that beat analysts' expectations.

Shares of rival Western Digital rose 4.3 percent.

Sage Therapeutic soared 42.5 percent to $47.74 after its postpartum drug succeeded in a study.

Wholesale inventories, due at 10:00 a.m. ET, are likely to have risen 0.2 percent in May. April's 0.6 percent rise was the biggest increase in 10 months that prompted economists to raise their second-quarter economic growth estimates.

A host of Federal Reserve officials, including Governor Daniel Tarullo and the presidents of the St. Louis and Cleveland Feds, are scheduled to speak at separate events.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)